Beware the Subscription Trap: How to Avoid Getting Stuck in Unwanted Commitments

For many Australians, the new year brings a range of new goals and resolutions, whether it be joining a gym, subscribing to a wellness app, or getting healthy with a meal-kit provider. However, these subscriptions should be easy to cancel, right? Unfortunately, some businesses are operating in what's described as a “subscription trap”, using unnecessarily convoluted strategies to make it difficult to unsubscribe.

What is a subscription trap?

Luke Nottage, Professor of comparative and transnational business law at the University of Sydney Law School, explains that a subscription trap occurs when a business makes it challenging for a consumer to cancel their subscription.

"It's essentially where a business supplier gets a consumer or perhaps another small business, to easily sign up to an ongoing subscription, but then makes it difficult to cancel or get out of that subscription."

A recent report by the Consumer Policy Research Centre (CPRC) found that 75% of Australians have had a negative experience when trying to cancel a subscription, with 32% feeling pressured to keep a subscription they wanted to cancel.

Real-life experiences

When Newcastle man Campbell Moore attempted to cancel a subscription to an unwanted music service, he found the task nearly impossible.

"I tried to cancel it, but the cancel button on the website just did not work."

Similarly, Lucy Irvine, a 26-year-old Sydneysider, faced a month-long ordeal trying to cancel her gym membership.

"There was no clear cancellation button on the gym's website. They present you with every option other than cancellation, which is very frustrating."

What can consumers do if they suspect a trap?

Dr. Nottage advises that under the current law, it’s often challenging to argue subscription traps as misleading conduct.

"If you say you can manage your subscription online but then you go through and you can do everything but cancel it, that’s not allowing you to manage it."

Plan to tackle the issue

On Friday, the Minister for Financial Services, Stephen Jones, announced that the federal government would continue to push for legislation prohibiting unfair trading practices, including subscription traps.

"These subscriptions or memberships should be just as easy to get out of as they are to sign up to. We want to get the laws introduced as soon as possible."

In the meantime, he urges Australians to remain vigilant against these practices.